Health andConsumers

Health andConsumers

3rd Pillar Retirement Products results of the public consultation

Anna PasseraDG SANCO UNIT B.4

Health andConsumers

Health andConsumers

Context

• Action 13 of the White Paper An Agenda for Safe, Adequate and Sustainable Pensions (2/ 2012):

• By 2013 the COM will present an initiative to increase the quality of third pillar pensions

• Aim: improve transparency and increase protection standards in business practices

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Health andConsumers

Health andConsumers

Process • Questionnaire to Stakeholders and Member

States (Oct 2012), to gather knowledge on national markets and what protection measures are already in place

• Public consultation of the Commission Staff • Working Document (25/4 – 19/7 2013)

• Feedback statement published 5/3

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Health andConsumers

Health andConsumers

Main findings • Definition: most agreed that the one proposed by the EC

was good starting point. Request for common terminology consistent between the three pillars

• Consensus on the need to look at shortcomings stemming from information asymmetry but different views on the most effective way

• Little support for self-regulatory codes

• Various opinions on EU certification scheme

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Health andConsumers

Health andConsumers

Consumers' RisksConsumers: Complexity of the products, high impact of charges, unclear calculation of benefits, inflexibility of conditions, no or limited choice to switch product or provider, market situation (fluctuation of interest rate and inflation, insolvency of provider, uncertainty of pensionable age, uncertain tax treatment, etc)

Industry: consumer lack of understanding on the need of sufficient contribution to have an adequate revenue, need to harmonise tax treatments to avoid double taxation

Consumer needs

Independent advice, comparable charges, switch options, flexibility of the contributions, periodic info on capital accrual

One set of clear transparency provisions, enough variety of choice

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Health andConsumers

Health andConsumers

Voluntary codes

•Advantages:

•Meeting consumers' risk profiles •Better adapt to specific markets•Less burdensome for industry•Enhance business standards of conduct

•Limits: non-binding nature, who is going to monitor the compliance?

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Health andConsumers

Health andConsumers

EU certification scheme

• Advantages:

• promote comparability of fees• enhance consumer confidence and competition if correctly enforced

and supervised by independent body

• Risks:

• excessive market standardisation (less product choice), increase in costs, quality certification should not be perceived as a financial guarantee, marketing tool?

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Health andConsumers

Health andConsumers

•Thank you for your attention

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